24-05-2021 CA Anil Kumar Bezwada


Most of times we as Tax payer concentrates only on tax payments, discharging our liabilities and regular tax compliances considering the way the bureaucrats are implementing the Tax laws with the threating measures. It is equally or more important for us to enjoy or the avail or utilize the benefits provided in the Tax Law. One of such massive benefit in the Customs law is Authorized Economic Operator Status. AEO Status holders enjoy with lot of fiscal, operational defined benefits that translate into savings in time and cost and compliance relaxation benefits.


Visakhapatnam City is hub for exporters, importers, SEZ’s, EOU’s SPTI’s logistic providers like transporters, carriers, airlines, freight forwarders, etc, Custodians or Terminal Operators, Container Freight Stations, Multi model transporters, Customs House Agents and Warehouse Owners, Port operators, authorized couriers, Stevedores, Steamer Agents e.t.c. All the above entities can apply for AEO Status and can enjoy the benefits of the Scheme. For that matter any business entity that is part of the international supply chain involved in the cross- border movement of goods can apply for AEO status.


The CBIC Board vide its Circular no: 33/2016-Customs dated 22/07/2016 amended from time to time introduced this Scheme & concept. Though the Scheme introduced few of years back, the momentum for Scheme reached, gained now only as over period of time Government rationalized the Scheme with relaxation of lot of conditions compared to the fast.


The benefits of the Scheme

  • Recognition worldwide as safe, secure and compliant business partners in international trade and get trade facilitation by a foreign Customs administration.  
  • Facility of Direct Port Delivery (DPD) of their import Containers and/ or Direct Port Entry (DPE) of their Export Containers;
  • For Importers/Exporters not opting for DPD/DPE, seal verification/scrutiny of documents by Custom officers would be waived. Consignments would be given out of charge or let export order, as the case may be, without any scrutiny by the Customs officers.
  • The containers selected for scanning will be scanned on priority, by giving front line of treatment.
  • Waiver of full or part of (50, 25, 100%) the Bank Guarantee requirements under the Customs or under any other domestic laws,
  • Waiver of Merchant overtime fees;
  • Eligible for the benefit of deferred payment of duties;
  • Waiver from transactional Post Clearance Audit instead Onsite PCA has been provided, the selection of the same shall be based on risk assessment of AEOs;
  • Waiver of solvency certification for Customs Brokers;
  • A lower risk score in risk analysis systems when profiling;
  • Faster disbursal of drawback amount through process eased out vide Circular 18/2017 Customs dated 29.05.2017;
  • Fast tracking of refunds and adjudications;
  • Faster completion of Special Valuation Branch (‘SVB’) proceedings in case of related party imports.
  • They will be given access to their consolidated import/export data through ICEGATE from a date that would be communicated separately.
  • All Custom Houses will appoint a “Client Relationship Manager” (CRM) at the level of Deputy/Assistant Commissioner as a single point of interaction with them.



The benefits of this program have been divided into 4 categories among the stake holders. For the economic operators other than importers and the exporters like all shipping & logistic companies one tier of certification (i.e. AEO-LO) whereas for the importers and the exporters, there will be three tiers of certification (i.e. AEO-T1, AEO-T2 and AEO-T3). The criteria’s required to be satisfied for each category has been mentioned in Para 1.2 of the above Master Circular. The economic operators covered under category AEO-T1 can enjoy substantial portion of the above benefits however there will be lesser benefits when compared to other operators covered under higher categories like AEO-T2 and AEO-T3. The benefits for the shipping companies have been mentioned in 1.5.4 of the above Master Circular.


Who can apply for the Scheme:-

The eligibility conditions and criteria for granting AEO Status has been listed in the Section 3 of the AEO Circular No. 33/2016 –Customs dated 22nd July, 2016 as amended by Circular No. 3/2018-Customs dated 17th January, 2018. An entity should fulfil the following criteria in order to apply for the AEO Status:

  • Established in India;
  • Business should be involved in Customs related activity;
  • Should have dealt with minimum 25 Customs documents (either Bill of Entry or Shipping Bill) in the last fiscal year; (MSME’s 10 documents)
  • Should have been in business activity for last 3 Financial Years.



The application can be filed online through web address The CBIC Board proactively over a period of time reduced the complications or difficulties and number of documents required to be attached while filing the application. The validity of AEO certificate is three years for AEO-T1 and AEO-T2, and five years for AEO-T3 and AEOLO. Many exporters or importers and shipping companies not applied for this Scheme due to lack of knowledge on the legal provisions of the Scheme. Once anybody obtains this AEO Status certainly then can save lot of time, money and energy so that they can compete domestically and in overseas in effective manner. 

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